Wednesday, October 7, 2009

What deflation?



The Manheim index of used car prices has risen over 20% this year through September. That's the biggest increase on record. The cash for clunkers program hasn't had much to do with this, since the rising price trend has been firmly in place for many months. I note reports in the news today that BMW is now beginning to increase output at its factories in response to strong demand, after cutting production sharply earlier this year. Sounds like a V-shaped recovery to me, and while some sectors are experiencing tough price competition, that's not the case for everyone, as this chart makes clear.

3 comments:

Cabodog said...

Not just BMW, but Cisco also:

4:11p ET October 7, 2009 (MarketWatch)
SAN FRANCISCO (MarketWatch) -- William Blair & Co. upgraded Cisco Systems on Wednesday, saying "pent-up demand" for the tech giant's products "has started to loosen up over the past few months."

Shares of Cisco rose 1.1% to close at $23.61 as analyst Jason Ader raised the company's rating from market perform, saying the networking gear maker is "benefiting from the macroeconomic recovery and its recent aggressiveness in winning deals."

"Our analysis suggests that there has been significant pent-up demand building over the last year for Cisco's products (across the board), which has started to loosen up over the past few months, and more recently, this demand trend has accelerated," Ader wrote.

Ader said San Jose, Calif.-based Cisco is seeing improved demand based on "new projects starting to get cleared and overdue networking maintenance needs."

seekingtraceevidence said...

This goes to show what happens when you destroy nearly 700,000 used vehicles that could have entered this market you effectively passed the tax benefit to the poor.
How successful was this misthought program?

Nakabunot Kay said...
This comment has been removed by a blog administrator.